Field Reports1 Nov, 2005 By: Thomas Haire, Nicole Urso Reed Response
Kevin Trudeau Sues ERA for $10 Million
LOS ANGELES — Infomercial host Kevin Trudeau, author and marketer of top-selling book "Natural Cures They Don't Want You to Know About," filed a lawsuit on Sept. 21 in Ventura County, Calif. Superior Court against the Electronic Retailing Association (ERA) and its president, Barbara Tulipane, for defamation and unfair business practices.
In the complaint, Trudeau calls the ERA an "anti-consumer and anti-competitive organization that protects rogue members who use electronic media to fleece unsuspecting consumers and that coordinates concerted action to eliminate competition from individuals and companies who refuse to join the ERA."
The lawsuit then goes on to list several non-ERA member direct marketing companies that Trudeau alleges have been referred to the Federal Trade Commission by ERA. The suit also lists a series of major ERA members that either filed bankruptcy, left consumers without products or were cited for false advertising, yet remain members of the association and some even part of its board of directors. According to the lawsuit, "The ERA punishes the Non-Joiners by making disparaging public comments about them and/or by referring them to the FTC pursuant to the ERA's Self-Regulation Program (ERSP)."
However, he argues, members who "dutifully fork over a substantial percentage of their annual revenues to the ERA rarely face such treatment."
Trudeau also claims that the ERA and its president and CEO, Barbara Tulipane defamed him in August by telling USA Today in an interview that he "tarnished the infomercial industry," and that, "it's easy to get sucked into what he's saying."
The ERA calls the suit "entirely without merit" in its formal response to the allegations. It goes on to say "The actions and statements challenged by Mr. Trudeau in his complaint do not, in the ERA's view, give rise to any of the legal claims he alleges." The Association maintains that its self-regulatory program is independently administered by the National Advertising Review Council (NARC), and that the ERA has no influence over which companies are reviewed or how cases are resolved.
Trudeau has never been a member of ERA, but he was sued several times for being one of the "rogue" marketers who he believes the ERA protects under special circumstance. Last year, the FTC filed a suit against Trudeau for erroneous marketing claims made in his infomercials for health-related products Coral Calcium and Biotape. The Commission banned him from appearing in, producing or disseminating direct response campaigns of certain types. "Trudeau cannot make disease or health benefits claims for any type of product, service or program in any advertising," stated the FTC.
Trudeau submitted to the prohibitions and paid a $2 million fine to settle charges. However, he rebounded in months with "Natural Cures," which topped the New York Times, Wall Street Journal and Amazon.com bestseller lists. The book provides natural remedies for at least 50 diseases including arthritis and heart disease, but critics claim that it is pure speculation; Trudeau uses false endorsements; and the infomercials should be banned. New York State's Consumer Protection Board (CPB) encouraged broadcast and cable stations to pull the infomercials, and Trudeau fired back with a lawsuit for violating his First Amendment rights. A federal court ruled in his favor and temporarily enjoined the CPB from interfering with his sales.